WILLEMSTAD–A legal dispute between ConocoPhillips and Venezuelan state oil firm PDVSA could leave Curaçao’s economically important Isla refinery without crude oil to process, posing a “potential crisis” according to Prime Minister Eugene Rhuggenaath.
Conoco won court orders allowing it to seize PDVSA assets in the Caribbean islands in efforts to collect on a US $2 billion arbitral award linked to the 2007 nationalisation of Conoco assets in the South American country.
A lien was first placed on the refinery holding “Refineria di Kòrsou,” followed by one Isla itself. Talks have meanwhile started between the US company’s lawyers and representatives of the holding as well as also government-owned fuel distributor Curoil.
The 335,000 barrel-per-day refinery leased to PDVSA, which provides as much as 10 per cent of the country’s Gross Domestic Product (GDP), could be left without crude supplies if all oil shipments to the island were stopped to prevent them from being seized, the prime minister added.
“We are aware of the potential risks for the operation Isla,” Rhuggenaath confirmed. “A halt to such would have a devastating impact economically and socially.”
PDVSA has already suspended oil storage and shipping from its Caribbean facilities, according to a company source.
Curaçao is prepared to purchase refined products on the global market to ensure it can maintain supplies for the local population as well as for shipping.
“This is indeed a potential crisis that can very profoundly affect the social and economic situation of our island, and therefore we are always willing to discuss and reach out to relevant parties,” Rhuggenaath added.
He said Conoco has yet to seize any assets. Curaçao was still scrutinising the liens – a legal instrument that paves the way for an asset seizure – because the government’s legal counsel did not fully understand it, he said.
Conoco is also seeking to seize assets on the nearby island of Bonaire, where PDVSA owns a storage terminal. In contrast, Isla belongs to “Refineria di Korsou” and is rented by PDVSA. “This is a different situation than in Bonaire,” explained the prime minister.
Neither PDVSA nor Conoco has contacted Curaçao authorities regarding how the legal dispute could affect the island, addedo Rhuggenaath.
ConocoPhillips said it has sought to resolve issues caused by its efforts to collect the arbitration award.
“We have been in touch with the local officials and are working to address their concerns,” spokesman Daren Beaudo said. “As we said previously, we will work with the community and local authorities to address issues that may arise as a result of enforcement actions.”
PDVSA did not immediately respond to an email seeking comment.
Source: The Daily Herald https://www.thedailyherald.sx/islands/76452-potential-crisis-at-curacao-refinery
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